US Bid Bonds for Canadian Contractors
Bidding public work south of the border means a different form, a much larger percentage, and — the part that catches most Canadian contractors out — a surety your Canadian carrier almost certainly cannot provide. Here is what changes, and what it takes to be ready before the bid date rather than after you win.
What Is a US Bid Bond?
A US bid bond is a three-party guarantee that if your bid is accepted you will sign the contract and furnish the performance and payment bonds the solicitation requires. The contractor is the principal, the owner or contracting agency is the obligee, and a surety stands behind the promise. If you win and then walk away, the surety answers to the obligee and comes back to you under the indemnity.
One correction worth making at the outset, because it appears constantly in surety marketing: the Miller Act does not require a US bid bond. That statute deals with performance and payment bonds on awarded federal construction contracts. The bid guarantee on federal work is a creature of the Federal Acquisition Regulation, not the Act.
- Federal work — FAR Part 28. A bid guarantee is required whenever a performance bond or a performance and payment bond is required
- Federal construction thresholds — performance and payment bonds on contracts exceeding $150,000, with alternative payment protections between $35,000 and $150,000
- State and municipal work — each state’s own “Little Miller Act”, with its own thresholds, its own percentages, and its own view of whether bid security is mandatory at all
- Private and commercial work — no statute. The requirement lives in the owner’s instructions to bidders, usually on an AIA or EJCDC form
- The forms — Standard Form 24 on federal work, AIA A310 on private work, EJCDC C-430 on municipal engineering projects
The mechanics will feel familiar if you have posted a Canadian bid bond on a CCDC 220 form. The obligation is the same in shape: sign the contract, produce the final bonds, or answer for what it costs the owner to go elsewhere. What is different is the size of the number, the size of the companion bonds, and — decisively — who is permitted to sign the paper.
What Actually Changes
Four US Bid Bond Numbers That Will Surprise You
Twenty Percent, Not Ten
A Canadian tender commonly calls for a bid bond at 10 percent of the bid. On US federal work the US bid bond must be at least 20 percent of the bid price, capped at $3 million. Most state and private work sits closer to 5 or 10 percent — but never assume the federal number is an outlier you can ignore.
One Hundred and One Hundred
Canadian practice commonly splits the companion bonds 50% performance and 50% labour and material payment. Federal US practice requires 100% performance and 100% payment. Your bonded exposure roughly doubles for the same contract value, and your surety has to have the capacity to match.
Ten Days at Award
If you are the successful bidder, you must execute the contract documents and furnish the bonds within ten days of receiving the forms. Miss it and the contracting officer may terminate for default. There is no Canadian-style agreement-to-bond step where the surety reconfirms — the commitment was made when it signed the US bid bond.
Forfeiture Is Not a Fine
A widely repeated myth says you simply lose the US bid bond amount. On federal work you are liable for the cost of acquiring the work that exceeds your bid, and the guarantee is available to offset that difference. The penal sum is a ceiling on recovery, not an automatic penalty — though some state and bespoke owner forms do treat a deposit as forfeit, so read the form.
Three Rulebooks
Where a US Bid Bond Is Required: Three Rulebooks
There is no single US rule. A contractor who learns the federal regime and assumes it travels will be wrong in most states, and a contractor who learns one state will be wrong in the next. Before anything else, establish which of these three regimes the job sits in — the answer determines the percentage, the acceptable forms of security and, most importantly, who may issue it.
Federal Contracts
The Federal Acquisition Regulation governs. A bid guarantee is required whenever a performance or payment bond is required, and the amount must be at least 20 percent of the bid price, not exceeding $3 million. Performance and payment bonds are required on construction contracts exceeding $150,000; between $35,000 and $150,000 the contracting officer selects two or more alternative payment protections instead. The bid form is Standard Form 24.
State and Municipal Contracts
Every state has its own analogue of the Miller Act, and they genuinely differ — in the percentage, in the dollar threshold that triggers it, and in which instruments the owner will accept. Connecticut fixes ten percent in statute and takes only a bid bond or a certified cheque; Massachusetts and Rhode Island fix five percent; New Hampshire, Vermont and New York set no percentage at all and leave it to the solicitation. The eight jurisdictions nearest Atlantic Canada are set out further down this page.
Private and Commercial Work
No statute applies. The requirement, the percentage and the form all come from the owner’s instructions to bidders. The dominant forms are AIA A310, current edition 2010, and EJCDC C-430 on water, wastewater and municipal engineering projects. Private bid security is customarily 5 to 10 percent. Note that A310 lets the owner and bidder extend the bid acceptance period by up to sixty days without the surety’s consent.
The practical instruction is unglamorous but it is the one that matters: read the instructions to bidders every time. In Maine and New Hampshire the statute will not tell you the bid security number because the statute does not set one. Some states go further and protect your choice of provider — Michigan’s statute expressly bars a governmental unit from requiring that the US bid bond come from a particular bank, surety company, agent or broker, which is worth knowing if a general contractor or owner starts steering you toward its own agency.
The Obligee’s View
What the US Bid Bond Is Protecting
A Bidder Who Can Actually Be Bonded
The US bid bond’s real function is to prove, before award, that a surety has already looked at your balance sheet and is prepared to stand behind you at 100% of the contract value. It screens out bidders who cannot finish what they start.
Recovery of the Excess Cost
If you win and then cannot or will not proceed, the obligee re-procures. The guarantee is there to absorb the difference between your bid and what the work ends up costing, up to the penal sum.
A Short, Certain Path to Award
The ten-day clock and the up-front bonding commitment exist so that an award does not stall while a contractor goes looking for a surety. That is why the sequencing burden falls on the bidder, and why it falls before the bid rather than after it.
State by State
US Bid Bond Thresholds Nearest Atlantic Canada
The federal 20 percent is the outlier, not the rule. Across the eight jurisdictions an Atlantic Canadian contractor is most likely to bid into, US bid bond security runs from five to twenty percent, three of them fix the number in statute and the rest leave it to the agency, and the list of acceptable instruments narrows sharply as you move south from Maine. Three states set no percentage in statute at all — which does not mean no bid security, only that the number lives in the solicitation rather than the law.
Federal
Security: at least 20 percent of the bid price, capped at $3 million.
Required: whenever a performance or payment bond is required — construction contracts over $150,000.
Forms: bid bond on Standard Form 24, postal money order, certified or cashier’s cheque, irrevocable letter of credit, or US bonds and notes.
Maine
Security: no statutory percentage — 5 percent in MaineDOT and Bureau of General Services practice.
Required: at the contracting authority’s discretion; performance and payment bonds above $125,000.
Forms: the widest list of the eight — surety bond, certified or cashier’s cheque, postal money order, certificate of deposit, money in escrow. The statute says bid security may be required to confirm the contractor is bondable.
Massachusetts
Security: 5 percent of the value of the bid, fixed in statute.
Required: building work over $150,000; public works over $50,000.
Forms: bid bond, cash, certified cheque, or a treasurer’s or cashier’s cheque. The surety must be qualified to do business in the commonwealth and satisfactory to the awarding authority.
New Hampshire
Security: nothing in statute — 5 percent in NHDOT practice.
Required: set by the solicitation; contract bonds at 100 percent above $75,000 for state work and $125,000 for a political subdivision.
Forms: per the solicitation. Do not carry the number over from the neighbouring state.
Vermont
Security: nothing in statute — 5 percent in VTrans practice, and that figure comes off federal-aid work.
Required: set by the agency; the performance and labour and material bonds are waivable at $100,000 or less.
Forms: certified cheque, bank draft, US Government bonds at par, or a bid bond.
New York
Security: no statutory percentage. NYSDOT states a fixed dollar bid deposit per contract rather than a percentage of the bid.
Required: set by the commissioner and named in the advertisement; municipal public work is competitively bid above $35,000.
Forms: certified cheque, bank cashier’s cheque, or other security the agency will accept. A bidder may withdraw if no award is made within 45 days.
Connecticut
Security: 10 percent of the bid — the highest fixed percentage of the eight.
Required: where the estimated cost of labour and materials is $50,000 or more.
Forms: bid bond or certified cheque only — no cash, no letter of credit. Connecticut also requires state prequalification before you can be the lowest responsible and qualified bidder.
Rhode Island
Security: at least 5 percent of the amount bid, set by regulation rather than statute.
Required: construction contracts with an estimated price over $25,000.
Forms: surety bond or the cash equivalent, certified cheque, bank or cashier’s or treasurer’s cheque, money order. It must be dated within 30 days of bid opening, stay valid for 60 days, and be payable to the Rhode Island General Treasurer.
Three details in that list cost more deals than the percentages do. Connecticut will not take cash or a letter of credit, and will not let you be the low bidder at all unless you are prequalified with the state before you bid — a process with its own lead time. Rhode Island dates the instrument, so a US bid bond executed too early is no good. And in New Hampshire, Vermont and New York the number is not in the statute at all, which means the only authority is the invitation to bid in front of you. Get the solicitation to your broker early enough that the surety can issue the US bid bond on the form the state actually names.
The Gate Most People Miss
Why Your Canadian Surety Cannot Sign a US Bid Bond
This is the part that stops Canadian contractors, and it has nothing to do with the strength of your surety relationship at home. It is a question of which legal entity is permitted to issue the paper, and there are two separate gates to clear.
Gate One — the Treasury List
The US Treasury’s Bureau of the Fiscal Service maintains Department Circular 570, the Listing of Certified Companies, under 31 U.S.C. §§ 9304–9308. On federal contracts a corporate surety must appear on that list. It is not a quality ranking or a courtesy register — it is a hard eligibility requirement, and a US bid bond from a company that is not on it is simply not acceptable security.
No Canadian Company Is On It
We checked the listing directly. Every certified company carries a US business address and a US state of incorporation; there are no Canadian-domiciled entities on it. The instructive example is Trisura: the Canadian company you may already deal with is not the entity that issues US bonds. Trisura’s US surety paper comes from First Founders Assurance Company, a New Jersey corporation with its own underwriting limitation and its own list of state licences. Same group, different company, fresh underwriting.
Underwriting Limitations and Co-Surety
Each listed company carries a Treasury underwriting limitation — the largest single risk it may assume on federal work, set at a percentage of its capital and surplus. First Founders sits at just over $10 million. Above a surety’s limitation the US bid bond has to be shared through co-surety or supported by certified reinsurance, which is a real constraint on a large single job and a reason capacity conversations start early.
Gate Two — State Admission
Treasury certification governs federal bonds only. On state and municipal work the separate question is whether the surety is licensed in that state. Massachusetts writes it into the statute: a US bid bond must be from a surety company qualified to do business in the commonwealth. A surety can be Treasury-listed and still be unable to bond your Massachusetts job, or licensed in a state and still ineligible for federal work.
The useful reframe is this. The question is not “will they accept my Canadian bond?” — on federal work they cannot, and on state work they usually will not. The question is “which US-domiciled carrier will underwrite my Canadian company?” That is a placement problem with real answers, and it is answered months before a bid, not in the week before one.
You can confirm any surety’s status yourself against Treasury’s published listing, which shows each company’s underwriting limitation and the states in which it holds surety licences.
Placement
How a Canadian Contractor Gets a US Bid Bond
There are four workable routes, and the right one depends on how much US work you expect to do, whether you already have a US entity, and how much of your balance sheet a US surety can actually reach. None of them is quick, which is the single most important thing to understand about the timeline.
A US Surety Underwrites You Directly
The cleanest outcome. A US-domiciled, Treasury-listed carrier writes the US bid bond on the strength of your Canadian company. It requires a surety comfortable reading Canadian financial statements, comfortable with a Canadian indemnitor, and willing to price the fact that its recourse sits north of the border. Not every US market will; the ones that do tend to have a cross-border practice already.
A Canadian Group’s US Paper
Several surety groups operate on both sides. You keep the relationship you have at home and the US bid bond is issued by the group’s US company. Be clear-eyed about what that means: it is a separate legal entity, with its own capacity, its own state licences and its own underwriting file. Goodwill built with the Canadian company helps the conversation — it does not carry the credit.
A US Subsidiary as the Bonded Entity
Incorporating in the US and having the parent indemnify solves several problems at once — it gives the surety a US-situs obligor, and it simplifies employment, tax and state registration. There is no federal rule requiring a bidder to be a US entity, so treat this as a commercial decision rather than a legal necessity, and take Canadian and US tax advice before you do it.
Non-Bond Bid Security
The route most Canadian contractors do not know about. On federal bids the regulation accepts a postal money order, certified cheque, cashier’s cheque or irrevocable letter of credit as bid security, not only a US bid bond. If your US surety paper is not in place before the bid date, a US bank letter of credit can get a compliant bid in without a US bid bond. It does not solve the performance and payment bonds at award — but it preserves the opportunity.
Whichever route you take, the underwriting file looks much the same: financial statements a US surety can read against US construction benchmarks, a work-in-progress schedule, your completed-job history, the banking relationship, and a general indemnity agreement. Expect questions about how your statements map to US presentation of work in progress and revenue on uncompleted contracts, and expect the indemnity to be the negotiation — who signs it, under which state’s law, and whether collateral is required where the assets behind it sit in Nova Scotia rather than New England. Have both Canadian and US counsel read the indemnity before anyone signs.
On cost, a US bid bond is usually issued without a separate premium — the surety earns on the performance and payment bonds if you win. That makes capacity, not price, the thing to negotiate. If you are also arranging bonding at home, our prequalification letter and agreement to bond pages explain how sureties set overall limits.
Side by Side
A US Bid Bond Against the Canadian Form You Know
If you have bonded work at home you already understand the instrument. The differences are specific and they are worth committing to memory, because each one has cost or capacity attached to it.
The Form and Where It Comes From
At home the US bid bond is normally CCDC 220, current edition 2024, and the requirement comes from the tender documents. In the US the form depends on the regime: Standard Form 24 federally, AIA A310 on private work, EJCDC C-430 on municipal engineering. The federal US bid bond requirement comes from regulation; everywhere else it comes from the solicitation.
The Amount and the Companion Bonds
CCDC 220 states a fixed dollar bond amount and the 10% convention comes from the tender documents rather than the form. Federal US work requires at least 20 percent of the bid price capped at $3 million, with 100% performance and 100% payment bonds behind it — against the 50/50 split common in Canada. Same contract value, roughly double the bonded exposure.
The Consent of Surety Gap
Canadian tenders commonly ask for an agreement to bond alongside the US bid bond — a separate undertaking that the surety will issue the final bonds. There is no federal US equivalent. The commitment is folded into the US bid bond itself, and the ten-day clock at award assumes it was settled before you bid. Do not go looking for a second confirmation step; it is not there.
The damages measure, by contrast, is broadly familiar. CCDC 220 measures the difference between your bid and the amount the obligee legally contracts for elsewhere. AIA A310 measures the difference in cost to award to the next qualified bidder, capped at the penal sum. The federal provision makes you liable for the cost of acquiring the work above your bid, with the guarantee available to offset it.
In all three the penal sum caps recovery rather than fixing a penalty — but a cash or certified-cheque deposit is far more exposed to a simple forfeiture argument than a US bid bond is, which is one more reason to post a US bid bond where you can.
Before You Bid
Where US Bid Bond Deals Come Apart
Almost every problem on this list is a sequencing problem. The US bid bond is not the hard part — the hard part is having everything behind it settled before you commit to a price and a date.
The Ten-Day Clock
The classic failure: a contractor obtains a US bid bond off an early conversation, wins, and then finds the surety wants collateral, a US entity or restated financials — with ten days running. Bonds must be in place before notice to proceed. Settle the full programme, the indemnity and any collateral before the bid, not at award.
A Mistake in the Bid
The federal system does allow correction or withdrawal where a mistake is disclosed before award, but the standard is evidentiary — clear and convincing evidence of the mistake, and of the bid actually intended, before correction is permitted. That means contemporaneous documents: take-offs, quotes, estimating worksheets, produced promptly. Keep and preserve the estimate file for every US bid you submit.
Capacity, Not Price
Federal bonds are hard-capped by the surety’s Treasury underwriting limitation, and above it the risk has to be shared or reinsured. A job that is comfortable for your Canadian surety may exceed the single-risk capacity of the US entity writing your paper. Establish the ceiling before you chase a job that sits above it.
What a Claim Costs You Later
A called US bid bond is a claim, and the indemnity makes you reimburse the surety for its loss and expenses. The larger cost is discretionary: work history and character sit at the centre of US surety prequalification, capacity is granted rather than owed, and the US surety market is small enough that a claim history travels.
One last thing worth saying plainly, because it is outside the bond and it derails more cross-border jobs than the bonding does: getting bonded is not the only gate. Contractor licensing is a state matter, prevailing wage and domestic material rules attach to public work, insurance has to be placed on US-admitted paper with state workers’ compensation, and moving your own crews south is its own problem. Price those before you price the job. If you want the underlying mechanics of how surety works, our surety bond overview covers it.
US Bid Bond FAQs
No, and this is the single most repeated error in surety marketing. The Miller Act deals with performance and payment bonds on awarded federal construction contracts. The bid guarantee is required by the Federal Acquisition Regulation — a regulation, not the statute. The distinction matters because the FAR is where the percentage, the cap and the acceptable forms of security actually live.
At least 20 percent of the bid price, and never more than $3 million. Solicitations usually express it as a percentage of the bid price or a stated dollar figure, whichever is less. That is roughly double the 10 percent a Canadian contractor is used to seeing on a CCDC 220 tender.
Performance and payment bonds are required on federal construction contracts exceeding $150,000. Between $35,000 and $150,000 the contracting officer selects two or more alternative payment protections instead. You will also see $100,000 and $25,000 quoted — those are the figures in the underlying statute, and both sets are current at different layers of the framework.
On federal bids, yes. The regulation accepts a US bid bond, a postal money order, a certified cheque, a cashier’s cheque, an irrevocable letter of credit, or certain US bonds and notes. For a Canadian contractor whose US surety paper is not yet in place, a US bank letter of credit is a practical way to get a compliant bid in. It does not solve the performance and payment bonds at award, but it preserves the opportunity.
On federal work, no. A corporate surety must appear on the US Treasury’s listing of certified companies, and no Canadian-domiciled company does. On state and municipal work there is a separate requirement that the surety be licensed in that state — Massachusetts, for example, writes into its statute that a US bid bond must come from a surety qualified to do business in the commonwealth. On private work an owner may accept what it wishes, but US owners and their lenders expect US-admitted paper.
It is the largest single risk a certified company may assume on federal work, calculated as a percentage of its capital and surplus and published alongside its listing. Above that figure the bond has to be shared between co-sureties or supported by certified reinsurance. It is a real constraint on large single jobs, and it is a good reason to confirm your carrier’s capacity before chasing work above it.
It helps, but understand what you are dealing with. The US company is a separate legal entity with its own capacity, its own state licences and its own underwriting file. Trisura is the clearest illustration: its US surety paper is issued by First Founders Assurance Company, a New Jersey corporation, not by the Canadian company. The relationship opens the door; the credit decision is made fresh.
Not as a matter of law — there is no federal rule requiring a bidder to be a US entity. In practice many contractors incorporate in the US anyway, because it gives the surety a US-situs obligor and simplifies employment, tax, insurance and state registration. Treat it as a commercial decision, take tax advice on both sides of the border first, and do not let anyone tell you it is compulsory.
Usually nothing on its own. Industry practice is that the US bid bond is issued without a separate premium and the surety earns on the performance and payment bonds if you win. That makes capacity rather than price the thing to negotiate. What drives the decision is financial strength, work in progress, completed-job history, the banking relationship, the nature of the project and the character of the contractor — the same factors a US surety weighs on any prequalification.
Generally no. On federal work you are liable for the cost of acquiring the work that exceeds your bid, and the guarantee is available to offset that difference — the penal sum is a ceiling on recovery, not a fine. The standard private form measures the difference in cost to award to the next qualified bidder, capped the same way. Be careful though: some state and bespoke owner forms do treat a deposit as forfeit, and a cash or certified-cheque deposit is far more exposed to that argument than a bond.
That is precisely the event the US bid bond covers. You must execute the contract documents and furnish the bonds within ten days of receiving the forms, and all bonds must be in place before notice to proceed. Miss it and the contracting officer may terminate for default and recover the excess cost of re-procurement against your guarantee. This is why the whole bonding programme should be settled before the bid rather than after the award.
Not on federal work. Canadian tenders commonly require a separate consent of surety alongside the bid bond; the US federal architecture folds that commitment into the US bid bond itself, on the assumption that a surety willing to sign it is committing to the final bonds. Some private owners still ask for a consent letter as a matter of administration, but do not plan around a second confirmation step that does not exist.
